Antitrust: successful opening of German gas markets allows early termination of E.ON commitments

The European Commission has released German energy firm E.ON from commitments to reduce long-term bookings on the German gas grid almost five years ahead of schedule. This is because, thanks to the successful implementation of the commitments, competition on the market has increased significantly.  Commissioner Margrethe Vestager, in charge of competition policy, said: “This case is a good example of how commitments decisions can open up markets to competition quickly and effectively. Since E.ON started to reduce its long-term bookings of pipeline capacity, other companies have been able to enter and take part in the German gas market. The commitments have resolved the competition problem even quicker than expected and are no longer needed now.” In May 2010, the Commission accepted commitments from E.ON to release large volumes of gas pipeline capacity and to reduce its bookings of long-term entry capacity in the NetConnect Germany grid. They were originally due to last until April 2021 and addressed the Commission’s concerns that long-term bookings may have prevented other gas suppliers from accessing the German gas market and competing with E.ON. Following the Commission’s decision, E.ON has actually booked significantly less capacity than the threshold set out the commitments. As a result, competitors have been able to enter the market and gain significant market shares. In addition, large amounts of transport capacity are now available so that competitors will continue to have access to the capacity they need to operate on the market. Moreover, the gas market has evolved insofar as market participants, including E.ON, now generally prefer short-term bookings, to be able to respond flexibly to changing market demand and market shares.